NEW YORK CITY (WABC) — During his preliminary budget proposal, Mayor Zohran Mamdani suggested “a path of last resort” of raising property taxes and dipping into New York City reserves to close a $7 billion budget gap, if Gov. Kathy Hochul doesn’t commit to raising taxes on corporations or those earning over a million dollars a year.
New York City Council appears leery of the idea.
“Think about the senior citizens living on the margins already. We have a food insecurity issue. People are struggling out there and this is a nonstarter,” said Queens Borough President Donovan Richards.
Mamdani “should be decreasing spending that isn’t improving New Yorkers’ lives. That’s where he should be focused now. Not increasing taxes, but decreasing un-useful spending,” said Andrew Rein of the Citizens Budget Commission.
A potential 9.5% property tax increase could impact over three million residential units and over 100,000 commercial buildings.
“If we do not (impose a millionaires’ tax), the city will be forced down a second, more harmful path,” Mamdani said Tuesday. “Faced with no other choice, the city would have to exercise the only revenue lever fully within our own control. We would have to raise property taxes.”
NYC Mayor Mamdani made the remarks during his budget address
Mamdani could draw down $980 million from the city’s Rainy Day Fund and another $229 million from the Retiree Health Benefits Fund.
The mayor says there would be no cuts to city services and increased spending for snow removal, outreach to the homeless and services for the mentally ill.
Gov. Hochul responded to Mamdani’s presentation, saying “I am not supportive of a property tax increase, I don’t know that that’s necessary.”
She noted the budget year does not start until July, and that months of negotiations are expected with the City Council.
NYC Mayor Mamdani says taxing the wealthy is the best option to close the budget gap
The city hasn’t raised property taxes in 23 years, since the Bloomberg administration, and the mayor is expected to face pushback from the City Council if he uses those monies to fulfill campaign promises.
“At a time when New Yorkers are already grappling with an affordability crisis, dipping into rainy day reserves and proposing significant property tax increases should not be on the table whatsoever,” Council Speaker Julie Menin said in a statement. “The Council believes there are additional areas of savings and revenue that deserve careful scrutiny before increasing the burden on small property owners and neighborhood small businesses, which could worsen the affordability crisis.”
Progressive councilmembers like Lincoln Restler are counting on the governor and state lawmakers to come through with the money.
“And if we are unable to get it, we’ll cross that bridge when we get there,” Councilmember Lincoln Restler said.
The Democratic Socialists of America released a statement saying not to raise taxes would be a “declaration of war” on Mamdani’s affordability agenda.
The budget presentation comes a day after Hochul announced a $1.5 billion investment into the city over the next two years.
That additional funding includes $510 million targeting costs that have shifted from the state to the city under prior administrations, including $300 million for youth programs, $60 million for public health, and a restoration of $150 million in sales tax receipts that would have been retained by the state.
During testimony in Albany, Mamdani had said the city is facing a $7 billion budget gap, down from what he initially estimated to be $12 billion last month, that he says he inherited from the previous administration, calling it “Mayor Adams’ budget crisis.”
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